Fact Check: Does Every Country Have Mandatory Insurance against Natural Disasters?

To justify the absence of any support from the government to pay for the damages of the recent floods, Prime Minister Rama has offered as an alternative the mandatory insurance of homes and businesses against natural disasters. Yesterday he announced that a draft law to that end will be presented soon.

In fact, the idea of mandatory home and business insurance has been a government plan for a long time, which it has been unable to implement because of opposition by the citizens.

But it seems that the government now intends to bank on the recent floods and the emotions around it by proposing once again the draft law so much desired by the insurance companies in Rama’s orbit. This time Rama made his proposal extra convincing by claiming that state-imposed insurance against disasters is the norm around the world:

The acceptance of the legal initiative for insuring homes and businesses against floods is a priority. We are the only country that doesn’t have such a legal measure and where afterward people affected are left at the mercy of fate and waiting only for the state budget which cannot deal with everything for ever.

But is this claim of the Prime Minister actually true?

It is very easy to verify that his claim about mandatory insurance is completely untrue: not only does not every country in the world have such policy, it is in fact a rather rare policy. And the countries that do have are not easily comparable with the case of Albania.

In the case of Europe, only France, Poland, and Switzerland have mandatory property insurance against natural disasters. In France, this is justified on the basis of national solidarity; in Switzerland, the mandatory insurance covers storms, floods, and snow, but not earthquakes; in Island, the only mandatory insurance is against fire, but this insurance is usually offered in a package deal including natural disasters. In Romania, only buildings but no other property needs to be insured.

In the rest of the world mandatory insurance is not the norm. Even in the US, which is prone to hurricanes, and Japan with its earthquakes, citizens are not forced to buy insurance from a cartel of insurance companies.